Sequester 101: What Does It Mean?

The spending cuts known as the sequester take effect Friday, barring any last minute deals. Sudeep Reddy explains what it means on Markets Hub. Photo: AP.

This transcript has been automatically generated and may not be 100% accurate.

... I ... calling a political breakthrough in the next several hours in ... the stock sells likely is that ... the so-called SciQuest ration begins tomorrow March first ... automatic spending cuts going and what do you need to know ... Sudeep Reddy joins us now from Washington DC Gillis are ... SciQuest ration one oh one lesson for the morning ... city pal are you ... I'm well are you are out what's going to happen tomorrow morning take this through this ... absolutely nothing will happen tomorrow morning when March first ... the city that is technically ... the deadline but I did he order actually has to come from the present under the law the president needs to give you Werder for ... agencies to cut their budgets even though they know this is going to happen so ... I I is ... that required by Obama by eleven fifty nine pm ... on Friday night to give the order for for SciQuest ration that gives you ... basically the full day ... due ... to talk about this a little bit more he's meeting ... earlier in the day with congressional leadership ... and die by the end of the day we still don't expect anything to happen but that's been the order goes out and we will see trickling out over the weekend said that the guidance from the Office of Management and budget ... the budget office for the White House and all the directives for the agencies to actually start the cutting ... but it will take weeks for adik I didn't actually take place ... and you know there's been a lot of stories that on the story is obvious and I lotta warnings right coming from Washington where where exactly can we expect to see costs ... one of the cuts technically do beginning of March first as soon as the order comes and and so the bike this would be reduced ... I do that the SciQuest ration minutes across the board hitting ... just about every government account it's basically ... a percentage ... across nondefense programs thirty percent across the Fed's current ... because of the way this is delayed from January first until March first ... ay ay compresses the time frame when its all these happened since the fiscal year ... the government goes through ... September this is ... basically eighty five billion dollars worth of cuts in one in one period ... but there's a difference again between how much the government by just how much it actually outweighs how much it spends ... so in that seven month period is to be about forty four billion dollars worth of cuts ... and ... we we don't know all the D tells about how it's going to come out but it's probably going to be about a month before you see at the most severe effects of the furloughs France's because ... the government has to give workers thirty days notice for furloughs and so it will be mid April first before you actually see some of those things occurring